onetary policy is, by common agreement, the defining function of a central bank. Uniquely for a central bank, the Reserve Bank of India undertook a variety of developmental initiatives in independent India, though monetary policy remained its central preoccupation. The principal structural features of the Bank's economic and financial environment and the resulting diversity in the nature of its responsibilities qs a central bank have already been discussed in the introductory chapter. Monetary policy, which is usually understood to represent policies, objectives, and instruments directed towards regulating money supply and the cost and availability of credit in the economy, could not remain unaffected by this inherited context. Therefore the Reserve Bank of India was prone to take a rather wider view of its monetary policy than more traditional central banks, including within its ambit the institutional responsibility for deepening the financial sector of the economy. Thanks to the Bank's own initiatives and the stimulus of the ongoing process of planned development, the institutional context of monetary policy underwent substantial change during our period. At the same time, tensions between the Bank's concern to regulate credit and its wider responsibility to spread and deepen the domestic financial system were often not far in the background. Some of these tensions might be regarded in the light of experience as transient or short-term while others persist to this day, but their impact on the Bank's decision-malung at the time can hardly be overlooked.

As important, the financing of planned development in a poor economy was a source both of challenge and of constraints for the Bank in its role as the monetary policy authority. While the short-term management of seasonal,

10

MONETARY AND CREDlT POLICY

inflationary, and balance of payments pressures remained an important focus of monetary policy, the overall...

...Introduction
The central bank of the country is the Reserve Bank of India (RBI). It was established in April 1935 with a share capital of Rs. 5 crores on the basis of the recommendations of the Hilton Young Commission. The share capital was divided into shares of Rs. 100 each fully paid which was entirely owned by private shareholders in the begining. The Government held shares of nominal value of Rs. 2,20,000.
Reserve Bank of India was nationalised in the year 1949. The...

...Reviewing RBI’s monetarypolicy framework
By Amol Agrawal
Of late, Mr. Deepak Mohanty, RBI’s ED has been giving some excellent speeches. The speeches are basic and tell you a lot about economic issues in India.
His recent speech looks at RBI’s monetary framework. He even reviews performance of Indian economy in each of the frameworks. See my previous blogpost on RBI’s monetary framework as well.
He divides RBI’s...

...﻿The Federal Reserve and MonetaryPolicy
Overview
In this web quest you will explore the role of the Federal Reserve in controlling the money supply and how actions of the Fed impact the nation’s economy.
The Federal Reserve System is also known as The Fed. Many people don’t realize the importance and power of the Federal Reserve. It was created to provide the nation with a safer, more flexible, and more stable monetary and financial system. The...

...Monetarypolicy is the monitoring and control of money supply by a central bank, such as the Federal Reserve Board in the United States of America, and the Bangko Sentral ng Pilipinas in the Philippines. This is used by the government to be able to control inflation, and stabilize currency. MonetaryPolicy is considered to be one of the two ways that the government can influence the economy – the other one being Fiscal...

...﻿Q1. What is monetarypolicy?
Answer:-
Monetarypolicy is government change in money supply to influence the economy, to solve economies problems. Economies problems include inflation in boom, unemployment etc. change in the money supply move interest rates up or down and affect spending in sectors such as business investment, housing, and foreign trade. Monetarypolicy has an important effect on both actual...

...MonetaryPolicy of the Philippines
Monetarypolicy is the monitoring and control of money supply by a central bank, such as the Federal Reserve Board in the United States of America, and the Bangko Sentral ng Pilipinas in the Philippines. This is used by the government to be able to control inflation, and stabilize currency. MonetaryPolicy is considered to be one of the two ways that the government can...